On December 22, 2009, the Ministry of Finance and CIRC jointly published Relevant Accounting Rules on Insurance Contract (“the Rule”). The long awaited rule finally lifted its veil at the end of this year.
Government officials from Ministry of Finance and CIRC commented on the rule. According to the officials, the rule is designed to eliminate the discrepancies existing in the accounting standards of A-share annual report and H-share annual report. All insurance companies are required to follow the rule in creating the 2009 financial report.
The rule mainly covers three components: split-up of mixed insurance contract, major risk evaluation and calculation of reserves of insurance contract.